The city took its name from a Native American mound on which guests at General Rawlings' hotel would sleep in summer, as the breezes cooled them and dispersed the mosquitoes.

[5] During the Civil War, Admiral Andrew Hull Foote made Cairo the naval station for the Mississippi River Squadron of over 200 ironclads, timberclads, hospital ships, transports, and other vessels.

Since Cairo had no land available for base facilities, the navy yard repair shop machinery was afloat aboard wharf-boats, old steamers, tugs, flat-boats, and rafts.

The naval station was moved upstream in 1862 when 10 acres (4.0 ha) of land was purchased in Mound City.

The Mound City Naval Station included a shipyard with marine ways, a foundry, marine barracks, supply offices, and a hospital;[6] but many repair facilities remained afloat because the Mound City land was frequently inundated by flood waters.

She was commissioned in January 1862 as part of the Mississippi River Squadron, U.S. Navy Lieutenant James M. Prichett in command.

On December 12, 1862 just north of Vicksburg, Mississippi, the USS Cairo became the first ship sunk by electrically detonated torpedoes during its mission to destroy Confederate batteries and clear the Yazoo River of underwater mines.